Related to the Economics in Practice on p. 476: According to the "paradox of thrift," decreased efforts to save will cause a(n)
A) increase in income and an increase in overall saving.
B) increase in income but no overall change in saving.
C) decrease in income and an overall decrease in saving.
D) decrease in income but an increase in saving.

Question

Quizplus · Accepted Answer

The paradox of thrift states that if everyone tries to save more, overall saving will not increase. This is because decreased spending will lead to decreased income, which will in turn lead to decreased saving.

Related to the Economics in Practice on P